LE TRA

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Logistics Execution

•The Logistics Execution (LE) component models the logistics processes in a company. It covers the entire process chain from the vendor through the company warehouse,

production facilities, and distribution centers to the customer. The LE processes include:

•The goods receipt process: Goods pickup from the vendor and put away in the company's warehouse.

•The goods issue process: Picking the goods and delivering them to the customer. •Internal warehouse processes such as posting change, stock transfer, and inventory. •The shipment process: Inbound and outbound shipments, and shipment cost calculation and settlement.

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Transportation

•A shipment represents a physical goods movement between two or more locations. [in Business]

•Transportation is a essential element in Logistic chain •Affects both incoming and outgoing goods

•Transportation costs also play an essential role in calculation in price of a product, thus necessary to keep transportation costs low

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Transportation planning point

Company code

Plant Transportation planning point

Storage location Shipping point

Warehouse number Loading point

Company code

Plant Transportation planning point

Storage location Shipping point

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Transportation planning point

 A group of employees responsible for organizing transportation activities - what to ship, when to ship, how to ship, where to ship

 Each shipment has to be assigned to a specific transportation planning point for carrying out the transportation planning

What to Ship???

How to Ship???

Shipping Document with all the details

Where to Ship???

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Transportation planning point

 We can have Transportation Planning Point according to our company’s needs, for example,

- according to geographical location or - mode of transport. Road Transportation planning point should I have?? Sea United States Department of Transportation How many

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Transportation planning point

• Transportation planning point is created in transaction OVXT or menu path: IMG  Enterprise Structure  Definition  Logistic Execution  Maintain Transportation Planning point

• Assign Transportation point to a company code

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Route

 Route is a fundamental basis to create and plan shipments in SAP

 Route is “Pathway” from goods/ services departure point to its destination point  The route determines the itinerary and the means of transport in shipping

 It also carries very essential information such as Vandor, transportation relevance, Transit time etc

 System determines Route in a sales document which can be copied to Delivery document and further in a Shipment document.

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Route controls

 When route is determined, lot of information is determined for the shipment document  Route maintenance and route determination maintenance is carried out under path: IMG>

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Shipment - Terms to understand

 Transportation connection point  Stages

 Legs  Routes

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Transportation connection point

A connection point can be one of the following:

 an airport or a harbor

 a border crossing

 a railway station

 a load transfer point

Transportation Connection point

Jamshedpur Factory Truck Shipping point JNPT Navi Mumbai Sea port Rotterdam

Sea Sea port

NL

Dresden

Rail DE

factory Customer

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Stages

 Stages contain information about geographical factors for a shipment

 Can be a Load transfer point, Border Crossing point or Legs

 Load transfer points: The point where a shipment is unloaded from one means of transport and loaded onto another.

 Border crossing points: The point where a shipment crosses the border.

 Leg: A beginning point and end point is defined

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Shipment Legs

Shipment leg is formed with connection between beginning point and end point. The following can be beginning points or end points:

 Transportation connection point (train station or port, for example)

 Shipping point (or loading point)

 Plant (or storage location)

 Customer location (may include customer’s unloading point)

 Vendor loading point

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Stages  Legs Types of Legs

 Preliminary leg (if leg’s departure point = Delivery Departure point)  Subsequent leg (if leg’s destination point = Delivery Destination point)

 Main leg (if leg has both departure point and destination point)

 Direct leg (if the leg links the delivery departure point directly to the delivery destination; and there are no more items to deliver)

 Return leg (if the leg links the delivery destination to the depot - where it has started from)

Jamshedpur Factory

Shipping point Truck

Load Transfer Points

JNPT Navi Mumbai

Load Transfer Points

Rotterdam

Sea Sea Port Rail

Netherlands

Dresden Factory location Germany

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Types of Shipment

Based on the different forms of transportation, the shipments can be categorized as below

 Individual shipment  Collective shipment

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Individual Shipment

Individual shipment: (Shipment type 0001 provided by SAP) An individual shipment

includes-One or more deliveries

One point of departure

One destination

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Collective Shipment

Collective shipment: (Shipment type 0002 provided by SAP) A collective (or milk-run) shipment includes

One or more deliveries Several points of departure Several destinations

One mode of transport

Delivery 2 (to WalMart) Delivery 1 (to K Mart) Delivery 2 Delivery 2 (to WalMart) Delivery 1 (to K Mart) Main Leg Delivery 2 Delivery 1 Subsequent Leg Delivery 2

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Transportation Chain

Transportation chain/ Multi-modal transport: (Shipment type 0004,0005,0006 provided by SAP)

A transportation chain is useful if you are dealing with deliveries that will be transported using multiple modes of transportation (and are thus processed by different departments at the transportation planning point).

•One or more deliveries

•Several points of departure

•Several points of destination

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Business Scenario - Transportation Chain

Customer -Berlin

Shipment

Document 1 _{Document 2}Shipment

Shipment Document 3

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Business Scenario - Transportation Chain

Customer

-Shipment Document 1

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Business Scenario - Transportation Chain- Challenges Ahead

If you want to depict a transportation chain within a single shipment document, you must also accept the limited functions available to you.

Reason: Almost all shipment document functions refer to the document as a whole:

 Outputs can only be printed for the entire document, not for individual legs

 Shipping units (Pallets, Container, etc) can only be created for the entire document, not for individual legs

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Determination of Legs

 ‘1’: Leg determination according to ITINERARY (as per the order of deliveries in the shipment document)

DeliveryShipping PointCustomer's Destination

1 Cincinnati Denver

2 Cincinnati Dallas

3 New York Harrisburg

Cincinnati

Delivery 1 and 2

Truck New York

Delivery Delivery 2

1,2 and 3 and 3

Truck Denver Truck

Delivery 3

Dallas Truck Harrisb

urg

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Determination of Legs

 ‘2’: A type of leg determination in which a preliminary leg is created for each starting point and a subsequent leg is created for each destination point.

 This type of leg determination is used for transporting deliveries that are to be sent by sea in a group, but originate from different shipping points or are to be transported to

different ship-to parties.

Shipping Customer's

Delivery 2 Delivery Point Destination

Washing ton 1 New York 2 Washington 3 New York Berlin Delivery 2 Dresden Berlin Dresden

Delivery 1 Delivery Delivery Delivery

Delivery 1

and 3 1,2 and 3 1,2 and 3 1,2 and 3

and 3

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Determination of Legs

‘3’: A type of leg determination in which a preliminary leg and a subsequent leg are created for each delivery. This leg determination type is used for transporting extensive amounts of goods that must be distributed among multiple deliveries because one delivery would not offer enough capacity.

Preliminary Leg Main Leg Subsequent Leg Subsequent Leg

Shipping Customer's DeliveryPoint Destination

Delivery 2 1 New York Dresden

2 New York Berlin

Washingt

Delivery 1

on Dresden

Delivery 1 Delivery 1 Delivery Delivery 2

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Determination of Legs

 ‘4’: Same as 1; but shipping type for Preliminary and subsequent legs are changeable in the shipment document

 ‘0’: Only determine assignment of deliveries to the stages  For documents in which such a complex situation exists that it is necessary to generate the legs manually. To reduce the maintenance effort, you can at least determine the assignment of delivery notes to stages.

 Blank: No leg determination  For documents in which legs are not relevant (Ex: Empty shipments)

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Determination of Legs - Manual Changes

 We can manually add the stages with the stages which are determined automatically  We can specify the different Mode of transport, service provider details, Inco terms for

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Transportation relevance - Control

 For carrying out transportation following should be relevant for transportation

- Delivery type - Delivery item category

- Route

 This is done under menu path: IMG> Logistic Execution> Transportation> Shipments> Maintain Transportation relevance

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Controlling shipments: IMG Shipment Document Type

Menu Path: IMG> Logistic Execution> Transportation> Shipments> Define Shipment types

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Completion type

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Process control

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Service level

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Leg indicator

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Shipping type

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Leg determination type

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Copying data

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Output determination

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Text determination

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Default Values

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Shipment document - structure

 The shipment document header contains data that applies to the whole document such as

shipment type, transportation planning point, route, deadlines, and status information. • The shipment document item contains inbound or outbound deliveries in inbound or

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Identifying the status of the shipment

 Red - Planning is completed. Shipment status planned  Yellow - Activities in Plant. Loading start & end

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Identifying the status of the shipment

 A shipment can have various statuses which uniquely identifies what activity still needs to be done, and what

activity has been completed

• Planned  Shipment’s Planning is complete • Check - in  Vehicle arrives at the Plant

• Start Load  Loading goods into the Vehicle begins • End Load  Goods are fully loaded into Vehicle

• Shipment Completion  Necessary documents are created (like Bill of Lading, material safety data sheets) and will be issued to the respective persons

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Creating Shipment documents

 Manual Creation

 Manual creation using planning proposal (use of planning profile)

 Automatic creation using collective processing - online & background

 Interfaced to an external transportation planning system (ex: SAP APO, LEO - an ORTEC product)

 Transactions used for creating shipments are

- VT01N - Single Document

- VT04 - Collective Processing

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Planning profile

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To create shipments and fill with default data (used during collective processing)

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Program: RV56TRGN (all the profiles are variants of this program)

RV56TRSP

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Activity Profile

 For each status completion, we can decide an ‘Activity profile’

 Activity profile determines the activities carried out when a specific status is set for the shipment document

 Activity profile is accessed and maintained under menu path: IMG> Logistics Execution> Transportation> Shipments> Define and assign activities profile

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Standard Reports available in SAP

 Utilization report - VT14- displays shipments that are not utilized to full capacity

 Transport Execution Monitor - VT20 - helps the transportation planner can react quickly to situations and also have a complete overview of the overall status of all planned shipments.

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Salient Features in SAP

 Will be able to select deliveries with specific criteria to attach in a shipment (screen info for delivery selection)

 Shall capture the Tender Status (Rejected by Forwarding Agent, Accepted by FA with conditions, Offer Cancelled, etc)

 Delivery may be split up into two or more shipments if they do not fit on to one truck

 Will be able to update Forwarding agent/ transportation planning department with a maximum price which you can offer for a shipment while tendering

 Will be able to see the estimated costs for a shipment once it is fully planned

 Will be able to quickly adjust the transportation plan by changing the mode of transport, the LSP, and even the route if necessary

 Will be able to keep track of changes made in the shipment document

 Will be able to copy the details (like Forwarding Agent, Route, Shipping type, Deadlines) from delivery into Shipment document automatically

 Will be able to maintain translation according to the business needs for Routes, Connection points, Stages, etc

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Shipment Costing

Why should I pay??? What it is??

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-Shipment Costing - Prerequisites

Have my shipment has a service agent???

Have my shipment attained the minimum status???

Is my shipment relevant for shipment costing???

Have my shipment has a service agent???

Have my shipment attained the minimum status???

Is my shipment relevant for shipment costing???

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Shipment cost document - Structure

 Shipment cost items either refer to a shipment header or shipment stages

 An shipment cost item can refer to Shipment header as insurance charges are

for complete shipment

 An item can refer to shipment stages as load transfer charges could be charged to each Load transfer point (Stage)

 These functions are controlled through shipment cost item category.

Header

Shipment

Stage 1

Shipment

Stage 2

Shipment

Header

Shipment

Stage 1

Shipment

Stage 2

Shipment cost Item

Shipment cost Item 2

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Factors deciding shipment costs

Factors which decide Shipment Costing

 Transportation planning point

 Service agents - Service agent group (attached to vendor master)

 Truck, Ship, Plane - Shipping type procedure group [T_72]

 Leg, Border Crossing point, Customs - Item determination group [T_71]

 Menu: SPRO - LE - Transportation - Shipment Costs - Pricing - Pricing Control - Define And Assign Pricing Procedures

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Shipment Costing - Pricing - Calculation Base

Some of the factors which can act as a Calculation Base to carry out Pricing  Geographical information (Point of departure and destination - Legs) and the

distance to be travelled and the Weight loaded

 Handling Units (Carton packaging, Pallets)  Delivery (To whom we deliver the goods)  Delivery Items

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Settling Shipment cost - How can we do in SAP???

 The settlement of shipment costs with the service agent is carried out per shipment cost item.

 This Settlement includes two major activities

 Assignment and forwarding of the shipment costs to FI and cost accounting for creation of accruals and posting of payables

 Automatic settlement using the self-billing procedure or manual settlement with the transportation service agent

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Shipment cost settlement - account determination

 G/L account Determination for Inventory Posting with GBB Transaction and

VBR General Modifier Key (T Code: OBYC)

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Shipment cost settlement - Determining PO

Factors which need to consider for settling shipment costs

 Plant, Purchasing organization, Purchasing group

 Service agents

 Transportation planning point

Integration: MM should have created a purchase order with the vendor Pre-requisite:

 Service agents [from Shipment item]

 Purchasing organization [from item detail: Service procurement]  Purchasing group [from item detail: Service procurement]

 Plant [from item detail: Service procurement]  Item category [Service - D]

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Freight Cost Estimate - A feature in SAP

Helps transportation planner to simulate Shipment Costs during Shipment Processing

The planner can change shipment data such as the forwarding agent, shipping conditions, mode of transport, and can calculate his shipment costs on the basis of this data.

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Billing Shipment costs to the customer in SAP - Feature in SAP

- The shipment costs that are billed to the customer are based on the actual shipment costs.

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Billing Shipment costs to the customer in SAP - Feature in SAP

 Delivery to billing copy control: VTFL (keep price source as F - Shipment costs)

 Ensure the shipment condition type exists in SD Pricing procedure

 Map the LE condition type to SD condition type in T_VC (in case of custom conditions)  Map the condition tables if we have access sequence assigned to the condition type

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Simulate Shipment costs at the order level - Feature in SAP

- for example, to determine whether transport by lorry or by train would be cheaper

or how much more it would cost to send by express delivery rather than by standard transport.

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